The Information

Persuasion: How to win in psychological warfare

Five seasoned negotiators share their lessons for getting a great deal.

by Chris Blackhurst
Last Updated: 05 Aug 2019
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The tycoon stood up suddenly, fixed us with an intense stare and clutched his chest.

"I was so hoping this would go well and I could welcome you into our family," he said. "But now I feel my heart is broken, I am so disappointed." 

For a second it seemed as if his large, beseeching eyes were going to shed a tear or two. Instead, the man turned to his assistant. "Come on, let’s go."

"Wait," one of us urged, gesturing for him to sit. "I’m sure we can work something out."

Some 10 minutes later, we shook hands. We’d dropped our price to a level the tycoon found acceptable. It was still above our lower limit but well below our opening offer. The clincher was the thought that our potential partner might leave. The mogul had gauged, correctly, that we wanted his business and, judging by his performance, he was ready to quit.

That scenario played out some years ago, when I was dragged in to be part of a team to land a long-term sales project, but it’s a tactic that others, notably US President Donald Trump, have employed to some effect. In his Hanoi summit earlier this year with the North Korean leader, Kim Jong-un, Trump ended the talks. "Sometimes you have to walk," he explained later. "This was just one of those times."

Anyone who supposes the art of negotiation is a simple case of one side saying one thing, the other countering with something else, and both agreeing to meet in the middle, should think again. Negotiation is psychological warfare and those who are most adept at it can impose their will on others while allowing them to imagine the opposite has happened.

Notorious persuaders

Jordan Belfort, played by Leonardo DiCaprio in the movie The Wolf of Wall Street, served 22 months in prison for fraud and money laundering. Belfort prided himself on being able to persuade anybody to do anything.

Unfortunately, he harnessed this ability to commit crime, making billions of dollars from selling stocks that didn’t exist and buying "every drug going". At his peak, Belfort crashed a helicopter while high on drugs and held dwarf-throwing sessions in his office.

On a recent trip to London, Belfort was reported by the London Evening Standard as saying: "Whether you are a parent selling to your kids that they have to make their bed, or a politician selling Brexit, there are always two cases you make: logical and emotional."

On Brexit, he said Theresa May could have taken the logical approach but "watching from the US, it seemed like the face of it all was that Nigel Farage. He was hitting this strong emotional base. It’s like IT sales when you close a deal." Maybe Johnson will fare better.

According to Belfort, former US president Bill Clinton is another example of someone who can use emotion well. Despite being caught lying, Clinton "was the best salesman. He’d give you this puppy-eyed look and you’d think he felt your pain," he said.

Emotion on its own, however, is not enough to clinch the deal. In a negotiation, it’s the type of emotion that really matters. At Harvard Business School, assistant professor Alison Wood Brooks gives her MBA students first-hand experience of this. They’re paired up and given an example of a contract negotiation to work through. But there’s a twist: one side is given a secret instruction – to display anger for a minimum of 10 minutes at the beginning of the discussion. And the outcome? The angrier the party, the more likely the talks will collapse.

Where once the theory of negotiation was fairly basic, concerning subjects such as prices and the offer of alternatives, now it is more complex and goes much deeper.

"Over the past decade… researchers have begun examining how specific emotions – anger, sadness, disappointment, anxiety, envy, excitement and regret – can affect the behaviour of negotiators," writes Brooks in the Harvard Business Review.

"They’ve studied the difference between what happens when people simply feel these emotions and what happens when they also express them to the other party through words or actions. In negotiations that are less transactional and involve parties in long-term relationships, understanding the role of emotion is even more important than it is in transactional deal making."

One emotion that can lead to no positive outcome at all – for one party at least – is anxiety. Take the TV show Dragons’ Den. The investors sit beside tables piled with cash while fledgling entrepreneurs pitch to them. The pressure is intense.

The dragons ask searching questions designed to unnerve the already nervous pitchers and enable the tycoons to acquire ownership of the entrepreneurs’ ideas at the lowest possible price. But there’s also a sub-game being played out – those dragons interested in investing will deliberately make comments designed to make their fellow panellists anxious about buying in to the idea.

Ultimately, those entrepreneurs that get the best deal are the ones who remain calm and provide clear, deliberate answers.

Sharpen your skills

Brooks’ advice is to try your utmost to avoid feeling anxious while negotiating. "How can you manage that? Train, practise, rehearse and keep sharpening your negotiating skills," she says.

Managing your own emotions is one thing but what about managing those of the person on the other side? Years ago, I was negotiating my departure with a colleague from our employer. Our company had changed hands and we wanted to make a clean break but the new owner’s tactic was to do nothing; he would not talk to us about it.

We hired a top lawyer. This infuriated the chief, who could not believe we’d raised the temperature by involving a third party. The boss, or rather the boss’s lawyer, wrote to ours seeking to open negotiations. Our lawyer waited three weeks before he replied, by which time the boss was beside himself with impatience. His reaction was concessionary.

Our lawyer pursued the same tactic throughout the entire negotiation: the other side would write; he would wait and wait. In the end, we got the settlement we were looking for. When we asked him, our lawyer said he knew not to negotiate on the boss’s terms but to force him to dance to our tune.

In some walks of life, using a third party is standard. Ever since 1972 and the work of Dr Harvey Schlossberg, a New York Police Department detective and psychologist, authorities around the world have recognised the need for a trained negotiator in a hostage situation. The NYPD was the first law-enforcement agency to use professional negotiators. Their colleagues at the Federal Bureau of Investigation have since developed a set of principles, the Behavioral Change Stairway Model, for approaching such crises.

In this model, negotiators work through a series of steps: active listening (understand the psychology of the perpetrator and let them know they are being listened to); empathy (understand their issues and how they feel); rapport (when they begin to see how the negotiator feels, they are building trust); influence (only when trust has been gained can solutions to their problem be recommended); behavioural change (they act and maybe surrender).

Another, less dangerous, area where expert negotiators are now considered de rigueur is football. Phil Smith is a leading football agent, working primarily in English football. His tips?  "Do your homework. Make it your business to find out how the other side likes to negotiate. Between you, be honest about what you want and what they want. Make clear what the parameters are – that’s very important."

Smith emphasises the importance of less talking and more hearing: "I can’t stress enough how listening is important. Them listening to you, and you listening to them."

And avoid complication. "If you can, keep it as simple as possible. The more complicated it is, the more chance the negotiations will be prolonged, and the more likely the deal won’t happen." As Smith points out: "For every 10 times transfer talks start, only one deal actually happens."

One of the most audacious commercial deals ever achieved in the UK turned the Millennium Dome, a national laughing stock after a disastrous opening, into a marketing triumph for telecoms company O2.

Russ Shaw was the O2 marketing director who led the negotiations with the dome’s then owner, US sports and entertainment giant AEG. "There were three bidders in the running: a very big bank, another company and ourselves. The dome’s circular shape fitted our branding, which was based on bubbles and oxygen."

Understand your opponent

However, Shaw spotted something that went beyond simply linking the venue to his company’s brand imagery. "We had reached a point at O2 where we’d grown by acquiring customers," he says. "Our churn rate was high, close to 40 per cent, and, frankly, we were pissing money away. Instead of letting customers go we now wanted to keep them, to give them reasons for staying with us."

Part of that offer, he realised, could be exclusive ticketing offers for concerts and sports events in the dome, since rebranded the O2. "AEG was looking for a deal of 15 years," Shaw says. "It was desperate to banish the legacy of the dome. We understood that but we wanted more than just to change the venue’s name. We also wanted exclusivity for our customers on a certain number of events a year."

An agreement was reached after five months of negotiations. One unexpected bonus for O2 was that it had underestimated how keen the public was to forget the fiasco of the dome’s millennium celebrations. Instead of taking years, the public embraced the O2 within months, quickly turning it into one of the world’s most successful indoor venues.

But, stresses Shaw: "It would not have completed if, in the negotiations, we’d not been very clear to ourselves about not just our tactics but how the venue fitted into the bigger picture for both parties. To do that we had to understand our strategy and we had to understand the strategy of our opponent."

By chance, Shaw already knew his opposite number, David Campbell at AEG, which made getting together easier. He says: "We took them through our high-level strategy and they took us through theirs, which was important when things went wrong at the lower level. We did not let them affect what we were trying to achieve. Throughout, we stuck to the aim of securing a high-level win-win for each side."

Shaw says he prefers to see negotiation as two sides coming together to achieve their individual aims rather than adversarial combat. "The sooner you can turn it into a partnership, the better," he says. "Some companies are not good at that but, if you want to succeed, if you want to reach your own objectives, then you have to make it work."

Negotiating isn’t easy. Some people, such as the tycoon who threatened to leave, do it instinctively. They know what works. Others have to learn. But if you define what you want, listen to what the other side is saying, learn about them and understand what they might want, you’ll increase your chances of a successful outcome. As long as you keep your cool.

Image credits:Getty Images


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